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JŠK Legal Flash

Are pay for delay agreements anticompetitive?

On 30 January 2020, the European Court of Justice (ECJ) issued its long-awaited assessment under competition law of pay for delay deals in the pharmaceutical industry. A drug's original developer and generics manufacturers commonly conclude such agreements in patent dispute settlements, where the parties agree to end the dispute in return for holding off on marketing a competitor's generic drug.

The ECJ assessed that a patent holder and a producer of generics could be considered potential competitors, even if they are not both on the market. It also clarified that patent dispute settlements as such are not anticompetitive. However, postponing the market entry has only a commercial purpose and is therefore more likely to be seen as anticompetitive and may also result in abuse of a dominant position.

24. 2. 2020

All damaged parties should have the right to compensation for harm caused by a cartel

In a preliminary ruling procedure, the Court of Justice of the European Union confirmed that the law of the Member States must make it possible for compensation for damages caused by a cartel to be granted to persons who are not direct participants in the market in which the cartel operates. The dispute in the main proceedings was brought by the state of Upper Austria against a cartel of elevator manufacturers. Upper Austria provided soft loans to support the construction of apartment buildings. As a result of the increased elevator prices caused by the cartel, Upper Austria granted a higher volume of loans and the loss it suffered consisted in the opportunity cost of not investing these funds at a higher interest rate. The CJEU concluded that the cartel could also be liable for such damage.

17. 2. 2020

Consequences for not disclosing the Right to Cancel a Life Insurance Contract

In December 2019, the Court of Justice of the European Union ruled on the interpretation of the Solvency II Directive regarding the right to cancel a life insurance contract and the duty of the insurer to inform customers of the right.

The decision states that if an insurance company doesn't inform its client about their right to cancel a contract or the provided information is severely deficient (the severity would be decided by the court in the case of a dispute), the period to exercise the right to cancel the insurance contract does not run at all - this applies even if the policyholder had learned of the right to cancel from another source, i.e. on TV or the internet. The policyholder would then be entitled to cancel the insurance contract without any time limitation, even if the contract has already been terminated and settled (the client's surrender had already been paid), unless the governing law of the contract provides otherwise.

(The Judgment of the CJEU in cases C-355/18 to C-357/18 and C-479/18 dated 19 December 2019)

13. 2. 2020
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